Tax Analysts Blog

A To-Do List for Wyden

Posted on Jan 6, 2014
While it isn’t quite official yet, the Senate will almost certainly have a new Finance Committee chair early in 2014. Current Chair Max Baucus has been nominated by President Obama to become ambassador to China. While it might have seemed that Baucus was doing a lot in 2013, the reality is that he has left behind a long to-do list for his replacement.

Baucus’s successor reportedly will be Sen. Ron Wyden of Oregon. The second-ranking Democrat on the committee, John D. Rockefeller of West Virginia, is not seeking reelection in 2014, and Sen. Charles Schumer of New York, another possibility, has said he won’t seek the post. Wyden’s term might be short -- the GOP has an excellent chance to recapture the Senate in the fall -- but that doesn’t mean he won’t try to put his mark on tax legislation. And he should, because there is a lot that Finance can and must accomplish.

1. Tax Reform

Despite the roadshow with House Ways and Means Chair Dave Camp and the release of a batch of discussion drafts at the end of the year, Baucus didn’t really move the needle on tax reform. He had even less leadership support than Camp. Baucus’s discussion drafts, like Camp’s, excited tax reform observers and gave everyone a lot to talk about, but they are incomplete and have few public supporters.

Does that mean Wyden is starting from scratch? Not quite, but there still is a ton of work to do in the Senate. Fortunately for tax reform advocates, Wyden is an ideal choice to succeed Baucus. He is very interested in tax policy, and he has written his own tax reform bill -- a comprehensive plan that he cosponsored with former Sen. Judd Gregg and Sen. Dan Coats of Indiana. Baucus’s exit means that the small chance of tax reform in 2014 is gone, but that doesn’t mean there is nothing for the new chair to do. Wyden needs to hit the ground running and push Finance members to support or help tweak his tax reform plan. The Oregon senator could use 2014 to lay the groundwork for a more serious push in 2015, assuming Democrats hold the Senate for Obama’s last two years in office.

2. Extenders

The mainstream press has spent much of the last week talking about the 50 tax provisions that expired at the end of 2013 and Congress’s failure to renew them. For those who follow the extenders every year, however, this is nothing new. Congress frequently fails to deal with them by the deadline, allowing many to temporarily lapse and then be extended retroactively. In that regard, this year isn’t all that different.

But there is a slight change to the dynamic because Baucus and Camp both refused to even mark up extenders legislation or hold committee discussions. They wanted to force lawmakers to deal with extenders as part of tax reform, but tax reform obviously didn’t happen. Now that the extenders have actually expired, both parties are starting to talk about a short-term extension.

And that means it’s up to Wyden to present a bill that renews extenders that should be renewed and allows others to lapse. Not all extenders are created equal -- many should be allowed to lapse permanently. If Wyden doesn’t show leadership on this issue, it’s likely that Congress will just robotically extend all of them, perpetuating the existing problems with efficiency and complexity.

3. EO Investigation

The Finance Committee hasn’t wrapped up its investigation into the IRS exempt organizations scandal. Baucus took a low profile on the issue, holding one hearing and ceding the spotlight to Dan Issa and Camp in the House. But there’s no reason for Wyden to continue that stance. The country would be better served by a balanced set of investigations. The public has a right to know the truth behind what happened at the IRS to allow such a tone-deaf application review and approval process to start and then continue for so long. Republicans would like to show that the White House ordered the targeting. The IRS and the administration would like people to believe that the scandal was confined to the Cincinnati office and a few low-level employees. The truth is somewhere in the middle, and the new Finance chair should do his best to uncover and report it.

Read Comments (1)

edmund dantesJan 6, 2014

Temporary tax rules are a terrible policy. Expiring provisions should either
be made permanent or allowed to lapse permanently. Temporary rules are great
for lobbyists and great for the members of the tax-writing committees, but they
are terrible for the economy.

"Tone deaf application review"? I think "political witch hunt" would be a more
accurate description. They did it to suppress dissent, and it worked. We'd
like to know who ordered it, but more importantly, we'd like to get the
political bias out of IRS at all levels. Remember when Obama "joked" about
turning the IRS loose on his enemies?

Submit comment

Tax Analysts reserves the right to approve or reject any comments received here. Only comments of a substantive nature will be posted online.

By submitting this form, you accept our privacy policy.


All views expressed on these blogs are those of their individual authors and do not necessarily represent the views of Tax Analysts. Further, Tax Analysts makes no representation concerning the views expressed and does not guarantee the source, originality, accuracy, completeness or reliability of any statement, fact, information, data, finding, interpretation, or opinion presented. Tax Analysts particularly makes no representation concerning anything found on external links connected to this site.